Define yield to maturity

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Reference no: EM131542784

Please help me to answer the question as the following:

Toyota is interested in borrowing $5 million for 90 days. National Australia Bank has quoted a rate of 1.125 percent under the prime rate of 6.25 percent. Daiwa Bank is offering Toyota a rate of 0.75 percent over the three-month LIBOR of 4.2 percent.

Required:

Part (A) Which is the better deal for Toyota, and what is the lower interest cost in dollars?

Part (B) Define yield to maturity. Why is it important?

Reference no: EM131542784

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